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Global airlines are projected to hit new profitability records next year, driven by peak load factors and high fleet utilization amid declining fares and ongoing cost challenges, according to the latest report from the International Air Transport Association.
Next year, the net profit for the worldwide airline industry is expected to rise by 3.9%, reaching approximately $41 billion, up from an estimated $39.5 billion this year—a new all-time high. Revenue is also forecasted to increase by 4.5%, totaling around $1.05 trillion.
“This is very encouraging news given the obstacles the industry faces, including rising costs due to supply chain bottlenecks, geopolitical tensions, slow global trade, and increasing regulatory hurdles,” said the IATA’s director general. “Airlines have built resilience into their operations that is helping maintain steady profitability.”
Passenger traffic is anticipated to grow by 4.4% in 2026, reaching about 5.2 million travelers. However, the average net profit per passenger is expected to stay steady at $7.90 for the upcoming year, the same as this year but still below the record high of $8.50 set in 2023.
“Profit margins at the industry level are still quite thin considering the value airlines provide by connecting people and economies,” noted the industry leader. “They support nearly 4% of the global economy and sustain 87 million jobs. Yet, compared to the profit margins of engine and avionics manufacturers or many service providers, airline margins are disproportionately small. For example, Apple makes more selling an iPhone cover than airlines make transporting an average passenger.”
“Within the broader air transport ecosystem, airline margins are especially unbalanced, notably when compared to those of parts suppliers and service companies,” he added. “There’s significant potential for airlines to add more value to economies if we can rebalance profitability across the supply chain, reduce regulatory and taxation burdens, and improve infrastructure efficiency.”
Fuel costs are expected to decline slightly by 0.3% to around $252 billion next year, with crude oil prices predicted to fall 11% to approximately $62 per barrel. Meanwhile, non-fuel operating expenses are projected to rise by 5.8% to about $729 billion, mainly due to increased maintenance costs driven by an aging fleet and supply chain disruptions affecting parts availability. Leasing costs have also soared to historic levels, further elevating ownership expenses. Fees associated with airports and air traffic control are also expected to continue climbing.
Regionally, Asia-Pacific is forecasted to generate a net profit of $6.6 billion in 2026, powered mainly by growth in China and India—driven by increased intra-regional tourism and a growing middle class. Despite this, airlines in the Asia-Pacific region earn the least per passenger at around $3.20, whereas the highest profits per passenger are recorded in the Middle East at approximately $28.60, followed by Europe at $10.90 and North America at $9.80.
Cargo transport is expected to increase by 2.4% next year to 71.6 million metric tons, defying many pessimistic forecasts amid significant shifts in global trade patterns.
Although China’s exports to the United States have declined, the substitution effect has mitigated trade tensions, as Chinese goods find alternative markets—indicating a shift in global trade flows. Despite capacity constraints and a slowdown in trade, cargo yields are predicted to stay relatively stable, with only a slight decrease of 0.5%, maintaining levels about 30% higher than pre-pandemic data.
“The resilience of air cargo has been remarkable,” the industry expert stated. “As trade adapts to a protectionist U.S. tariff environment, air cargo has proven vital, especially with strong growth in e-commerce and semiconductor shipments supporting artificial intelligence advancements.
“Front-loading shipments to beat tariff deadlines and adjusting to demand surges—especially for goods redirected from the U.S. to new markets—highlight the pivotal role of air cargo in the global economy,” he added.
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